UK Economy Close To Recession As Inflation, Cost Of Living Rise

Britain’s economy shrank in the second quarter, official data showed Friday, as the country heads towards recession under a new prime minister.

UK gross domestic product dropped 0.1 percent in the April-June period after a rise of 0.8 percent in the first quarter, the Office for National Statistics said in a statement.

The Bank of England (BoE) expects the economy to enter a year-long recession by the end 2022 as Britons endure a cost-of-living crisis with inflation at its highest level in decades.

“With May’s growth revised down a little and June showing a notable fall, overall the economy shrank slightly in the second quarter,” said ONS director of economic statistics Darren Morgan.

“Health was the biggest reason the economy contracted as both the (Covid) test and trace and vaccine programmes were wound down, while many retailers also had a tough quarter.”

Morgan said this was “partially offset by growth in hotels, bars, hairdressers and outdoor events across the quarter, partly as a result of people celebrating the Platinum Jubilee” that marked Queen Elizabeth II’s 70 years on the throne.

The ONS added that the UK economy slumped 0.6 percent in June.

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